The Genomics Revolution at a Discount

When the history of medicine and healthcare comes to be written, the 2020s may be seen as the beginning of a new dawn. It’s the time of a tectonic shift in treatments for disease through gene therapy, and how the healthcare system is administered.

This may prove every bit as important as the period after World War II when the US pharmaceutical industry boomed, selling many new drugs. At the same time, new social healthcare systems such as the UK’s National Health Service arrived, creating a more structured administration of health services.

At the heart of today’s changes are both cutting-edge science and long-established digital technology. On the one hand, a cost revolution in genomics could make tailored treatments affordable. On the other, the application of digital technology to e-healthcare, hastened by the Covid-19 pandemic, is leading to new levels of efficiency. Taken together, these two phenomena could add up to the most notable time in medical history in more than 50 years.

Why should investors be interested now? Not only do these changes seem likely to propel notable growth in the revenues of healthcare’s pioneering companies but also the opportunity to invest comes at a relatively lower cost than a year ago. As the interest rates have risen, they have pushed down stock valuations, yet the transformative potential of genomics and e-healthcare remains intact.

Genome Sequencing – the Cost Revolution

Genome sequencing is a process of deciphering the DNA sequence of an organism's genome, which allows for genuine breakthroughs in disease treatment and diagnostics. Advances in the genomic technologies are making us think differently about our bodies, helping to identify genetic factors contributing to common diseases as well as discover genes responsible for rare disorders. New technologies are being successfully harnessed to dramatically shrink the cost. Indeed, over just 11 years from 2010 to 2021, the cost of sequencing a human genome fell from $47,000 to only $600, according to the National Human Genome Research Institute.

As costs decline, the genomics treatments and diagnostics are becoming more viable:

• Alnylam has developed a drug to treat nerve disease caused by a disorder where misfolded protein accumulates in certain tissues. A once rare condition, it is now affecting upwards of an estimated 200,000 people.¹
• NIPT by Illumina enables pre-natal screening for sex chromosome abnormalities and common chromosomal conditions including trisomy 21 (Down Syndrome), trisomy 18, and trisomy 13.²
• Amgen’s Imlygic is a gene therapy drug used to treat inoperable melanoma. Imlygic’s clinical trials showed a substantial survival benefit in patients with earlier metastatic disease and in patients who hadn't received prior systemic treatment for melanoma.
• Messenger RNA (mRNA)-based delivery solutions famously served as a basis for the highly effective CoVID-19 vaccines by Moderna and BioNTech.

Applications previously considered beyond possible, like personalised medicine and gene editing, appear to become more feasible in the near future.

DNA Sequencing - Cost per Genome, $

Source: Human Genome Research Institute, 2022.

e-Healthcare – Surging Demand

The application of digital technology to healthcare is less technologically advanced, but arguably no less revolutionary. The pandemic was the mother of this invention, forcing healthcare systems to harness digital technologies to deliver patient care at a time when doctors and nurses could not do so in person.

Visits to telemedicine providers surged by 50 to 175 times during the pandemic, according to one estimate. As a result, health professionals and patients alike experienced e-healthcare’s efficiencies, preparing the way for rapid adoption in remote communities and by over-stretched health services alike, triggering forecasts of rapid growth (see illustration).

Global eHealth Market Size, $bn

Source: Grand View Research, 2022. "*" represents an estimate.

Exposure to the Innovators

To give investors a stake in the innovators driving progress in genomics and e-healthcare, we have carefully designed the VanEck Genomics and Healthcare Innovators UCITS ETF. It invests in the companies reshaping healthcare, improving quality of life.

To give you a sense of the ETF’s underlying index, it includes the companies pioneering the modification of cells’ genetic makeup and breakthrough mRNA technologies, as well as technology platforms for the development of genetics-based healthcare therapies. Within e-healthcare, it encompasses medical software providers, telemedicine companies, e-commerce pharmacies and producers of remote monitoring devices.

These are all companies that have the potential to do well out of doing good. They’re doing nothing less than reshaping our healthcare systems, ushering in real progress.